RFMD Announces Expansion To Accommodate Rising Demand For Compound Semiconductors

Greensboro, NC -- RF Micro Devices announced plans to expand its compound semiconductor manufacturing capacity to support growth expectations in the Company's Cellular and Multi-Market product groups.

RFMD anticipates increased demand for its compound semiconductor process technologies as a result of favorable market trends in the Company's primary markets. In the cellular handset market, the increasing adoption of highly integrated, multi-chip transmit modules and the migration to 3G multimode devices are expected to drive increased demand for RFMD's GaAs pHEMT and RFMD's GaAs HBT (both AlGaAs HBT and InGaP HBT). These market trends require greater quantities of compound semiconductor content and are expected to underpin a five-year compound annual growth rate of greater than 20% from 2007-2012 in the market for cellular front ends.

Additionally, in markets served by RFMD's Multi-Market products group, it is anticipated the migration to 802.11n (GaAs HBT and GaAs pHEMT) and the increasing adoption of WiMAX (GaAs HBT and GaN) will be among the primary drivers of increased compound semiconductor content and accelerated market growth. RFMD's GaN process technology is quickly being recognized as a superior process technology for applications that require high power, linearity and bandwidth, as compared to existing technologies, such as silicon LDMOS.

Asif Anwar, Director of Strategy Analytics GaAs and Compound Semiconductor Technologies (GaAs) service, said, "RFMD has consistently been the world's largest supplier of GaAs devices for several years as a result of its leadership in the cellular handset PA space. The Company continues to move in line with the requirements of the cellular handset market, and this will continue to drive the volume at RFMD. RFMD has also developed a coherent multiple market strategy to target higher value segments with the rollout of its GaN and GaAs pHEMT technologies as well as the expansion of its IP and product portfolios through the proposed Sirenza acquisition. This dual 'high volume-high value' strategy will help the Company remain at the forefront of the compound semiconductor industry."

Bob Bruggeworth, president and CEO of RFMD, said, "The markets served by RFMD are growing, and RFMD is growing its compound semiconductor content within these markets. The addition of our third fab will enable us to capture a greater percentage of this growth while also reducing manufacturing costs and driving continued improvement in operating profitability. Once complete, our third fab, in conjunction with our second fab, will focus on high volume cellular and WLAN front end products that utilize GaAs HBT and GaAs pHEMT. The new fab will also provide capacity for the production of wafer-level packaged SAW filters and the development of new, next-generation process technologies that provide highly integrated front end functionality. Our first fab will focus on high value multi-market products that utilize specialty GaN, GaAs pHEMT and GaAs HBT technologies."

RFMD is currently increasing its manufacturing levels of both GaAs HBT and GaAs pHEMT in order to satisfy immediate forecasted demand.

RFMD To Acquire Sirenza Microdevices For $900 Million

Greensboro, NC and Broomfield, CO -- RF Micro Devices, Inc. (RFMD) and Sirenza Microdevices announced they have signed a definitive merger agreement.

Under the terms of the merger agreement unanimously approved by the respective boards of directors of the two companies, each outstanding share of Sirenza's common stock will be exchanged for a combination of 1.7848 shares of RFMD common stock and $5.56 in cash. Outstanding options to purchase Sirenza stock will be assumed by RFMD and converted into options to purchase RFMD stock. Based on RFMD's closing stock price on Friday, August 10, 2007, the last trading day prior to the announcement of the transaction, the consideration is valued at $16.64 per share, which represents a 17% premium over Sirenza's closing stock price on such date, and an offer value of approximately $900 million comprised of $300 million in cash with the balance in stock. The transaction is intended to allow all or a portion of the consideration receivable in RFMD stock to be tax-free to Sirenza stockholders. Upon completion of the transaction, current RFMD and Sirenza stockholders will own approximately 67 percent and 33 percent, respectively, of the combined company on a fully diluted basis.

The transaction is expected to be completed in RFMD's third fiscal quarter, ending December 29, 2007, and is subject to approval by the stockholders of both companies as well as regulatory approval. RFMD expects the transaction to be accretive to non-GAAP EPS within six months of closing, with modest synergies assumed.

The management teams of RFMD and Sirenza will be combined to address the expanded opportunities created by the merger. Bob Van Buskirk, president and CEO of Sirenza, will relocate to North Carolina and will lead RFMD's new Multi-Market Products Group. Bob Bruggeworth, president and CEO of RFMD, will continue as president and CEO of the combined company. The post-closing board of directors of the combined company is expected to consist of nine members from RFMD and two members from Sirenza.

"This strategic acquisition brings together two companies with leadership positions and considerable expertise in RF systems and solutions," said Bob Bruggeworth, president and CEO of RFMD. "It creates the world's largest, most diversified and best positioned RF company, with a broad set of customers and a diversified product portfolio of high performance components and systems- level solutions. The transaction will allow RFMD to capitalize on the RF integration and systems-level design expertise we continue to pioneer in the cellular world and apply those capabilities across Sirenza's broad footprint in multiple high-growth RF markets, including broadband/CATV, wireless infrastructure, WiMAX and aerospace and defense. Similarly, the transaction will allow Sirenza to expand its revenue stream beyond component-level solutions and drive supply chain and procurement efficiencies, as a result of RFMD's leadership in high-volume semiconductor manufacturing. Our two businesses are highly complementary in terms of customers, markets, products and manufacturing expertise, and our combination will create an RF market leader with breadth, scale and capabilities that are unrivalled."

"We are very pleased to be announcing this transaction, which we believe clearly serves not only best interests of the shareholders of Sirenza, but also the interests of the shareholders of RFMD as well as the customers and employees of both companies," said Bob Van Buskirk, president and CEO of Sirenza. "We have great potential to accelerate revenue growth and expand margins by leveraging the technology base, supply chain and leadership position RFMD has achieved. There is a tremendous opportunity to apply the highly integrated, systems-level design expertise demanded by RFMD's cellular handset customers to the markets that Sirenza currently serves. RFMD and Sirenza serve customers representing a combined total addressable market of greater than $20 billion, and our very complementary companies can deliver more highly integrated solutions that will enhance the quality, efficiency and performance of our customers' end-products."